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by Frank James
In his testimony a few minutes ago to Congress's Joint Economic Committee, Federal Reserve Chairman Ben Bernanke didn't say the economy is in recession. Fed chairs generally don't call recessions.
But from his response to a question from Sen. Chuck Schumer you could draw the conclusion that the economy is certainly recessionish. And he did say it is possible.
Mr. Chairman, on page four of your testimony, you say that the
economy could, quote, "even contract slightly." I think this is the most pessimistic you have been about the possibility of recession.
Am I correct in understanding that you now believe a recession is possible, certainly more likely than it was a few months ago?
MR. BERNANKE: A recession is possible but a recession is a technical term, defined by the National Bureau of Economic Research, depending on data which will be available quite a while from now. So I'm not yet ready to say whether or not the U.S. economy will face
such a situation.
However it's clearly a period of very slow growth extending back to the fourth quarter of last year. And we are trying to set our policies appropriately for that situation.
SEN. SCHUMER: Do you believe the economy is contracting right now?
MR. BERNANKE: Our estimates are that we are slightly growing at the moment. But we think that there's a chance that for the first half as a whole, there might be a slight contraction.
According to official definition of recessions used by economists, you need two consecutive quarters of contraction for a recession to be official.
So Benanke's remarks to Schumer, which were similar to what was in his written testimony, could be interpreted by some as the Fed chair diagnosing that the economy is currently encountering something very much like a recession.
Comments
God, I am tired of them lying to us. I am sooo tired of their bogus economic indicator figures. Half of our problem comes from their lies.
Posted by: Bob | April 2, 2008 11:26 AM
I'd like to think he's being cautious with his words because he doesn't want to panic people. But I wonder if he'd be equally cautious if we had a democratic president.
Swamp Guys: You're still having a problem with your "Preview" button. When I click "Preview" to proof my comment, it does not offer me a box to type a letter for verification and an error occurs.
Posted by: Grandblvd03 | April 2, 2008 11:45 AM
We should be listening to the Dyslin Truth Hammer. His 401k is going gangbusters on his YTD returns. He's just the tonic this corrupt state needs. Hill toss Dickie Turbin Durbin from his ivory tower and restore honor, truth and Republican values to the Senate.
http://www.ecpzone.com/images/article/1194021072170_f1_2.jpg
Posted by: friendsofDyslinforSenate | April 2, 2008 11:50 AM
I've really had enough of the "are we in a recession" topic... We need to do something about the problem, instead of talking about the problem!
Posted by: Coach Phil | April 2, 2008 12:45 PM
Horrible news for Democrats. Despite all efforts to tell us otherwise, we are not yet in a recession. If there is still growth in Q108, we'll have a tough time hitting a recession before election day. Slowing economy? Yes. Recession? Not yet.
Posted by: VivianC | April 2, 2008 12:51 PM
Bad news for Democrats and the media (often one and the same) because Bernanke will not say the word they want to hear. The definition of a recession is two consecutive quarters in which the Gross National Product declines. Sorry to disappoint you recession rooters, but the GNP has been on a gradual upward curve and is projected to continue that way (source: Financial Forecast Center).
Posted by: Garrison | April 2, 2008 1:36 PM
Be careful Tribune. If you keep yelling recession in your headlines, your advertisers may get the message and reduce even further their ad expenditures. If that happens, prepare for more layoffs. Remember the theory behind the "big lie." Repeat it loud enough and often enough and soon it will come true.
Posted by: Sanbourne | April 2, 2008 1:55 PM
The only thing that comes to mind is....
WELL, DUUUUUUUUUUHHHHHHHH!
Posted by: Jim | April 2, 2008 2:03 PM
DEPRESSION IS LOOMING !
REAL HARD DEPRESSION IS LOOMING.
Posted by: timo | April 2, 2008 2:33 PM
Lessons for Wingnuts. "Not horrible" is not the equivalent of "good." You folks seem to have missed this point numerous times over the past 7+ years. Here's a partial list
Economy: If the best you can say is that it's not technically in a recession, then you're admitting the economy is still lousy, and thus have no basis to crow about it.
War: If the best you can say about a war is that, five years into it, an increase in troops has sort of stabilized violence and that there is no end in sight, you are admitting the war is not going well.
Katrina: If the best you can say about your govt's horrible handling is that the State govts are responsible too, you're still admitting your gov't screwed up.
9/11: If the best you can say about having failed to prevent a horrible attack is that it was not all your fault, you really don't have much to be proud about.
I realize things must be grim from your perspective. You've been faithfully cheerleading the worst president ever and at every step, it still gets worse. Please have the dignity to admit that the situation is bad. Do not demonstrate your depraved character by pretending that mediocrity (the best possible characterization for any of the above) is something to be lauded.
Posted by: a blinkin | April 2, 2008 2:54 PM
"7/06/2006 HAPPY BIRTHDAY GEORGE BUSH, HAPPPPPPPPPY BIRTHDAY"
INFLATION, NO BIG DEAL.
RECESSION, NOT TO WORRY!
ECONOMIC GROWTH, PRETTY SOLID!
EMPLOYMENT, NOT BAD!
HAPPY BIRTHDAY MR. PRESIDENT. I TOLD THE AMERICAN PEOPLE WHAT YOU WANTED ME TO TELL THEM. DURING AN ELECTION TIME AS I TOO KNOW THE "STAKES ARE HIGH"
HAPPY BIRTHDAY MR. PRESIDENT, I CAN SEE YOU KNOW ON RUSH LIMBAUGH, I MT RUSHMORE RIGHT NEXT TO DICK CHENEY, FRED FIELDING, DAVID ADDINGTON, AND ALBERTO (I SOLD EVERY MEXICAN) to homeland security GONZALES.
ARCHIVES DON'T LIE!
Posted by: Roger Morris | April 2, 2008 3:14 PM
Ask anyone on mainstreet if we are in a recession, an the answer months ago would be yes. This is hardly news that the fed is admitting, or at least almost admitting, that we are in a recession. We already knew it.
Posted by: marc | April 2, 2008 3:22 PM
The country hopes that Hillary displays more class than the crude Hillbilly gutter trash that she has been demonstrating so far. HillBilly Bill has lost all credibility with his trashy politics. Billy you should know that only he who is without sin may cast the stone. The Disfunctional Clintons are a bad example of family value. Barack Obama and his wonderful family highlights all that is good in America and what we should strive for. We should try to be like the Obamas and avoid the disfunctional Clintons.
Posted by: Christopheur | April 2, 2008 4:57 PM
How many people are going to keep listening to this BS. A recession is when you have 2 months back to back of negative growth. We haven't seen one month less 2. This is pure made up media blitz that everyone is falling for. The rich bankers are just getting richer while us worker bees get stuck with higher prices and interest. This is all a big put on to put a Democrat in the office. W's numbers for low jobs and production are all much better than Clinton's was while he was in office. Why are so many letting themselves be hoodwinked by this fabricated mess? It'll come out one day that the media conspired to create this economic downture but it'll be too late, Obama will be in office.
Posted by: John H. K. | April 2, 2008 6:12 PM
Hmmm...does anyone find it funny how the media tends to create the very problems they "report"? Think about it...
Posted by: Anonymous | April 2, 2008 10:17 PM